Wednesday, May 23, 2012

Light snacks in Brussels

As expected, last night’s dinner for European leaders did not yield any concrete results. The quest for growth and a broader vision on the Eurozone’s future continues.

Yesterday’s informal Summit of European leaders will not make history as a breakthrough for Europe or the Eurozone. As expected, it was only a stopover on the way towards the June summit. According to European Council president Herman van Rompuy after the meeting, European leaders are on a good way to adopt a growth compact in June, probably along earlier lines of more European funds, investment projects and structural reforms. It is obvious that a June growth compact will be a compromise with which both the austerity and spending supporters can live, illustrated by Van Rompuy’s statement that “opposing deficit reduction and growth is a false debate. They are two sides of the same kind.”

While a growth compact is in the making, all other broader issues remain highly controversial. Issues like common Eurobonds and a common European bank deposit insurance scheme were apparently mentioned yesterday but without any progress. At the same time, however, leaders agreed on the need “to take Economic Monetary Union to a new stage” and to “strengthen the economic union to make it commensurate with the monetary union.” Van Rompuy’s statement that he would report in June on “the main building blocks and on a working method to achieve this objective” shows that these issues will not be part of the growth compact in June. The “vision thing” has once again been postponed.